Chasing Full Employment
By LOUIS UCHITELLE
Published: February 12, 2006
A fairly decent Read on the manner in which Full Employment and Inflation have been considered in earlier years. This Author has always felt that the Claim that Full Employment was a major factor on Inflation is wrong. Inflation does not find generation in the supply of Basic Living services. The elements of mass production technology, Resource conservation, and durability remain the latest and best across the production cycle, because of the need for such provision. Unemployed Labor must still retain about 70% of such services, paid through Government welfare, or through family associations. They would not seem to be a Generator of Inflation, though this Author lacks statistical proof.
I believe it is the lack of real Investment opprotunity which is the prime generator of Inflation. Real Investment opprotunity being defined as any Investment which will provide genuine Production Profit ratios over the lifespan of the Investment. The greatest element in Inflation is the vast Price increases in Speciality-Product luxury Goods. They have Production cycles where Resource wastage is common, Productivity Labor values are low, with unnatural Markups throughout the Distribution chain. Most Consumers will spend excess Profits, Wages, and other funds, when real Investment opprotunity is insufficient to absorb the additional funds.
Labor is not the culprit in their Consumption patterns, per sec. It might be a lack of Business initiative or imagination, it could be an excess of Profits through monopolistic Price scheduling practices, or it might be Oversupply with excessive Resource draft; but it is doubtful it is the fault of the ordinary Consumer. The Economy malfunctions, not because of the Blue Collar segment of the Labor Force, but from the misdecisions of the While Collar management. lgl